For most companies, corporate credit cards handle the bulk of business spending. But out-of-pocket expenses—from mileage and client meals to small cash purchases—are an unavoidable reality.
While these reimbursable expenses may not be your largest spend category, managing them through a manual process can be disproportionately cumbersome and time-consuming.
Employees are required to save a wallet full of paper receipts, complete complex Excel sheets, and manually route them for approval. For the finance team, this means deciphering complex reports, manually entering data, and processing slow paper-based reimbursements.
This friction leads to frustrated employees and an administrative burden on your team. A modern expense management system can eliminate this struggle.
The Hidden Friction of Out-of-Pocket Expenses
While often seen as a lesser issue compared to corporate card reconciliation, a poor reimbursement process creates significant problems that can impact employee morale and operational efficiency.
A Frustrating Experience for Employees
Employees find it difficult to track every small cash purchase or remember the details of a trip taken weeks ago. This can demotivate employees who have to spend their money for business purposes and then navigate a difficult process to get it back. The result is often delayed or incomplete expense reports.
An Inefficient Workflow for Finance
When reports finally arrive, they often require significant cleanup and manual data entry into your accounting system. Processing reimbursements through payroll or by issuing physical checks is slow, unreliable, and adds extra work for the accounting team.
An Incomplete View of Company Spend
When the process is a hassle, employees may simply not bother submitting smaller expenses. This means you lack a complete picture of your total company spending, especially in travel and entertainment, which can affect the accuracy of your departmental budgets and forecasts.
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Why Out-of-Pocket Expenses Create Unique Hurdles Across Industries
Even as a secondary challenge, the nature of out-of-pocket spending creates specific pain points in different work environments.
Sales-Driven Organizations (IT, Mid-Market)
Sales teams are constantly on the road, incurring numerous out-of-pocket expenses for client meals, parking, tolls, and other incidentals. For them, a slow and difficult reimbursement process is a major point of frustration. Delayed reimbursements can impact personal cash flow and morale for the very people responsible for driving revenue.
Companies with Field Operations (Construction)
Employees like construction superintendents and route drivers are not sitting at a desk. They make small on-the-go purchases and are not tech-savvy. The burden of saving paper receipts in a vehicle and filling out spreadsheets at the end of the week is a major inconvenience, leading to lost receipts and inaccurate reporting.
Non-Profits
Volunteers and staff often use personal funds for event supplies, travel, and program-related activities. A clunky reimbursement process can be a deterrent for volunteers and creates an unnecessary administrative burden for staff, taking time away from the organization's core mission. For compliance, every dollar spent must be tracked, regardless of the payment method.
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How Fyle Streamlines Reimbursements for Out-of-Pocket Expenses
Fyle streamlines the entire reimbursement process, making it simple for employees to submit expenses and easy for finance teams to manage and pay them.
For On-the-Go Submissions
Fyle empowers employees to quickly capture receipts using the Fyle mobile app. An employee can simply take a picture of a receipt, and our AI-powered technology will automatically extract the data, minimizing manual entry. They can also track mileage with point-to-point mapping, ensuring accurate and timely submissions from anywhere.
Automated Workflows and Approvals
Once an employee submits their expense report through the app, it’s automatically sent through your pre-configured multi-level approval workflows. Managers receive notifications and can approve reports directly from their own mobile app or within their email inbox, which eliminates bottlenecks and speeds up the entire process.
Fast and Direct Reimbursement with ACH
Forget cutting checks. Fyle supports ACH payments for reimbursements. Once a report receives final approval, your finance team can initiate a direct deposit to the employee's bank account right from the Fyle platform. This ensures timely reimbursement and dramatically improves employee satisfaction.
Give Your Employees a Better Experience
Managing out-of-pocket expenses doesn't have to be a source of friction. By providing your team with a simple, mobile-first solution, you can improve employee morale, reduce the administrative workload on your finance team, and gain a complete picture of all company spending.
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